When planning an audit, and auditor should
a. Consider whether the extent of substantive procedures may be reduced based on the results of tests of controls
b. Determine overall materiality for audit purposes
c. Conclude whether changes in compliance with prescribed internal controls justify reliance on them
d. Evaluate detected misstatements
Ans: b. Determine overall materiality for audit purposes
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Jamieson is considering a 5-year, $250,000 project with annual cash flows of $90,000. If the company's required return is 10%, determine its discounted payback.
A) 3.79 years B) 4.01 years C) 3.27 years D) 3.43 years
As a firm's maintenance commitment increases:
A) the breakdown maintenance costs increase, and the preventive maintenance costs decrease. B) both the breakdown maintenance costs and the preventive maintenance costs decrease. C) the breakdown maintenance costs decrease, and the preventive maintenance costs increase. D) both the breakdown maintenance costs and the preventive maintenance costs increase. E) None of the above is true.